Question 1

Trend refers to

Accepted Answer

A)  the scale used on the x- and y-coordinates. 
B)  increases but not decreases of a variable. 
C)  decreases but not increases of a variable. 
D)  a general tendency for a variable to rise or fall. 
A)  the scale used on the x- and y-coordinates. 
B)  increases but not decreases of a variable. 
C)  decreases but not increases of a variable. 
D)  a general tendency for a variable to rise or fall.

Question 2

GDP using the expenditure approach equals the sum of personal consumption expenditures plus

Accepted Answer

A)  gross private investment. 
B)  gross private investment plus government expenditure on goods and services. 
C)  gross private investment plus government expenditure on goods and services minus imports of goods and services. 
D)  gross private investment plus government expenditure on goods and services plus net exports of goods and services. 
A)  gross private investment. 
B)  gross private investment plus government expenditure on goods and services. 
C)  gross private investment plus government expenditure on goods and services minus imports of goods and services. 
D)  gross private investment plus government expenditure on goods and services plus net exports of goods and services.

Question 3

11 Appendix: Numeric and Graphing Questions
  
-A time series graph can show both the level of a variable and the speed with which the variable changes over time.

Accepted Answer

A) True 
 B)False

Question 4

The chain-weighted output index

Accepted Answer

A)  uses only the current year's prices to calculate growth in real GDP. 
B)  uses prices for the current year and the previous year to calculate growth in real GDP. 
C)  must be calculated only every other year. 
D)  is an inaccurate way to measure growth in real GDP and so has been replaced by the "nominal-to-real" index. 
A)  uses only the current year's prices to calculate growth in real GDP. 
B)  uses prices for the current year and the previous year to calculate growth in real GDP. 
C)  must be calculated only every other year. 
D)  is an inaccurate way to measure growth in real GDP and so has been replaced by the "nominal-to-real" index.

Question 5

Which of the following is NOT a part of the income approach to determining GDP?

Accepted Answer

A)  rental income 
B)  gross private domestic investment 
C)  net interest 
D)  indirect business taxes 
A)  rental income 
B)  gross private domestic investment 
C)  net interest 
D)  indirect business taxes

Question 6

Which of the following are parts of the business cycles?

Accepted Answer

A)  peak and potential GDP 
B)  real GDP and potential GDP 
C)  recession and expansion 
D)  inflation and recession 
A)  peak and potential GDP 
B)  real GDP and potential GDP 
C)  recession and expansion 
D)  inflation and recession

Question 7

On a time-series graph with a ratio scale,

Accepted Answer

A)  the slope of the line is negative when the level of the variable is rising. 
B)  the same distance along the vertical axis measures different amounts of the variable. 
C)  time is plotted on the vertical axis rather than the horizontal axis. 
D)  it is impossible to determine a trend. 
A)  the slope of the line is negative when the level of the variable is rising. 
B)  the same distance along the vertical axis measures different amounts of the variable. 
C)  time is plotted on the vertical axis rather than the horizontal axis. 
D)  it is impossible to determine a trend.

Question 8

Canada's economy expanded by...0.1 percent in the second quarter...further evidence that the economy has stalled...following a first quarter slip in gross domestic product. The second quarter figures fell well below forecasts of a 0.7 per cent growth in real GDP. Exports....fell for the fourth consecutive quarter. The accumulating gloom is increasingly discouraging business investment. Consumer spending remains strong and corporate profits were at their highest since 2004. "The sources of strength in the second quarter are clearly unsustainable," said Sal Gautieri, senior economist at BMO capital markets.
Canada Avoids Fall into Recession, www.FT.com, by Christopher Mason, August 30, 2008
-According to the article,________ in ________ have contributed to Canada's ________ change in real GDP.

Accepted Answer

A)  increases; consumption and exports; expected 
B)  decreases; exports and investment; unexpected 
C)  increases; consumption and investment; unexpected 
D)  decreases; exports and government spending; expected 
A)  increases; consumption and exports; expected 
B)  decreases; exports and investment; unexpected 
C)  increases; consumption and investment; unexpected 
D)  decreases; exports and government spending; expected

Question 9

The approach to GDP that sums compensation of employees,rental income,corporate profits,net interest,proprietors' income,depreciation,and indirect taxes and subtracts subsidies is the

Accepted Answer

A)  opportunity cost approach. 
B)  expenditure approach. 
C)  added cost approach. 
D)  income approach. 
A)  opportunity cost approach. 
B)  expenditure approach. 
C)  added cost approach. 
D)  income approach.

Question 10

-In the above figure,which point represents the under use of resources?

Accepted Answer

A)  point F 
B)  point G 
C)  point H 
D)  point K 
A)  point F 
B)  point G 
C)  point H 
D)  point K

Question 11

If we compare the U.S.GDP and the Chinese GDP,

Accepted Answer

A)  real GDP per person is about the same in the two countries. 
B)  U.S. real GDP per person is less than China's real GDP per person once we adjust for currency differences. 
C)  China's real GDP per person is less than real GDP per person in the United States. 
D)  real U.S. GDP per person was much larger than China's real GDP per person when purchasing power parity prices are used but is less than China's real GDP per person when exchange rate prices are used. 
A)  real GDP per person is about the same in the two countries. 
B)  U.S. real GDP per person is less than China's real GDP per person once we adjust for currency differences. 
C)  China's real GDP per person is less than real GDP per person in the United States. 
D)  real U.S. GDP per person was much larger than China's real GDP per person when purchasing power parity prices are used but is less than China's real GDP per person when exchange rate prices are used.

Question 12

$$\begin{array} { | c | c | } 
\hline { \text { Item } } & \begin{array} { c } 
\text { Millions of } \
\text { dollars }
\end{array} \
\hline \begin{array} { l } 
\text { Personal consumption } \
\text { expenditure }
\end{array} & 80 \
\hline \begin{array} { l } 
\text { Government expenditure on } \
\text { goods and services }
\end{array} & 30 \
\hline \text { Net taxes } & 35 \
\hline \text { Gross private domestic } & 20 \
\hline \text { investment } & 10 \
\hline \begin{array} { l } 
\text { Emports of goods and services }
\end{array} \
\text { Exports of goods and services } & 20 \
\hline
\end{array}$$
-Use the information in the table above to calculate the value of net exports.

Accepted Answer

A)  $10 million 
B)  $0 
C)  -$10 million 
D)  $30 million 
A)  $10 million 
B)  $0 
C)  -$10 million 
D)  $30 million

Question 13

Which of the following is NOT included in the income approach to measuring GDP?

Accepted Answer

A)  net interest 
B)  net exports 
C)  corporate profits 
D)  compensation of employees 
A)  net interest 
B)  net exports 
C)  corporate profits 
D)  compensation of employees

Question 14

What is the difference between real and nominal GDP and why do economists make this distinction?

Accepted Answer

Real GDP is a measure of the final goods

Question 15

GDP does not directly include intermediate goods because

Accepted Answer

A)  intermediate goods are not valuable. 
B)  intermediate goods are not useful to consumers. 
C)  that would count the intermediate goods twice. 
D)  that would understate the true size of GDP. 
A)  intermediate goods are not valuable. 
B)  intermediate goods are not useful to consumers. 
C)  that would count the intermediate goods twice. 
D)  that would understate the true size of GDP.

Question 16

Gross domestic product is the total ________ produced within a country in a given time period.

Accepted Answer

A)  market value of all final and intermediate goods and services 
B)  market value of all goods and services 
C)  amount of final and intermediate goods and services 
D)  market value of all final goods and services 
A)  market value of all final and intermediate goods and services 
B)  market value of all goods and services 
C)  amount of final and intermediate goods and services 
D)  market value of all final goods and services

Question 17

In the circular flow of economic activity

Accepted Answer

A)  aggregate expenditure measures the dollar value of purchases of factors. 
B)  aggregate expenditure measures the dollar value of purchases of final goods and services. 
C)  aggregate income measures the dollar value of labor resources only. 
D)  aggregate expenditure is measured as it moves through the financial markets. 
A)  aggregate expenditure measures the dollar value of purchases of factors. 
B)  aggregate expenditure measures the dollar value of purchases of final goods and services. 
C)  aggregate income measures the dollar value of labor resources only. 
D)  aggregate expenditure is measured as it moves through the financial markets.

Question 18

$$\begin{array} { | l | c |} 
\hline  { \text { Item } } & \begin{array} { c } 
\text { Billions of } \
\text { dollars }
\end{array} \
\hline \text { Consumption expenditure } & 6,258 \
\hline \text { Investment } & 1,623 \
\hline \begin{array} { l } 
\text { Government expenditure on } \
\text { goods and services }
\end{array} & 1,630 \
\hline \begin{array} { l } 
\text { Exports of goods and } \
\text { services }
\end{array} & 998 \
\hline \begin{array} { l } 
\text { Imports of goods and } \
\text { services }
\end{array} & 1,252 \
\hline
\end{array}$$
-The table above gives the values of different expenditures in the United States during 1999.Answer the following questions about the United States.
a) What was the value of net exports of goods and services in 1999?
b) What was (nominal) GDP equal to in 1999?
c) What was the (nominal) value of total production equal to in 1999?

Accepted Answer

a)Net exports of goods and services equa

Question 19

Gross domestic product (GDP) measures the

Accepted Answer

A)  number of final goods and services produced in the economy in a given time period. 
B)  number of final goods and services sold in the economy in a given time period. 
C)  market value of old and new final goods and services sold in the economy in a given time period. 
D)  market value of final goods and services produced in the economy in a given time period. 
A)  number of final goods and services produced in the economy in a given time period. 
B)  number of final goods and services sold in the economy in a given time period. 
C)  market value of old and new final goods and services sold in the economy in a given time period. 
D)  market value of final goods and services produced in the economy in a given time period.

Question 20

The four categories of expenditure used by the expenditure approach method to calculate GDP are

Accepted Answer

A)  consumption expenditure, taxes, saving and investment. 
B)  consumption expenditure, investment, net imports and saving. 
C)  saving, taxes, government expenditure and investment. 
D)  consumption expenditure, investment, government expenditure and net exports. 
A)  consumption expenditure, taxes, saving and investment. 
B)  consumption expenditure, investment, net imports and saving. 
C)  saving, taxes, government expenditure and investment. 
D)  consumption expenditure, investment, government expenditure and net exports.

Trend refers to

GDP using the expenditure approach equals the sum of personal consumption expenditures plus

11 Appendix: Numeric and Graphing Questions -A time series graph can show both the level of a variable and the speed with which the variable changes over time.

The chain-weighted output index

Which of the following is NOT a part of the income approach to determining GDP?

Which of the following are parts of the business cycles?

On a time-series graph with a ratio scale,

The approach to GDP that sums compensation of employees,rental income,corporate profits,net interest,proprietors' income,depreciation,and indirect taxes and subtracts subsidies is the

-In the above figure,which point represents the under use of resources?

If we compare the U.S.GDP and the Chinese GDP,

Which of the following is NOT included in the income approach to measuring GDP?

What is the difference between real and nominal GDP and why do economists make this distinction?

GDP does not directly include intermediate goods because

Gross domestic product is the total ________ produced within a country in a given time period.

In the circular flow of economic activity

Gross domestic product (GDP) measures the

The four categories of expenditure used by the expenditure approach method to calculate GDP are

What Is Economics

The Economic Problem

Demand and Supply

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

Exam 4: Measuring GDP and Economic Growth

Trend refers to

GDP using the expenditure approach equals the sum of personal consumption expenditures plus

11 Appendix: Numeric and Graphing Questions -A time series graph can show both the level of a variable and the speed with which the variable changes over time.

The chain-weighted output index

Which of the following is NOT a part of the income approach to determining GDP?

Which of the following are parts of the business cycles?

On a time-series graph with a ratio scale,

The approach to GDP that sums compensation of employees,rental income,corporate profits,net interest,proprietors' income,depreciation,and indirect taxes and subtracts subsidies is the

-In the above figure,which point represents the under use of resources?

If we compare the U.S.GDP and the Chinese GDP,

Which of the following is NOT included in the income approach to measuring GDP?

What is the difference between real and nominal GDP and why do economists make this distinction?

GDP does not directly include intermediate goods because

Gross domestic product is the total ________ produced within a country in a given time period.

In the circular flow of economic activity

Gross domestic product (GDP) measures the

The four categories of expenditure used by the expenditure approach method to calculate GDP are

What Is Economics

The Economic Problem

Demand and Supply

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters